Gold Slightly Up After Downbeat U.S. Retail SalesBy Jim Wyckoff
Tuesday July 14, 2015 08:40
(Kitco News) - Gold prices pushed just above the unchanged level in early U.S. trading Tuesday, following a U.S. retail sales report that did not meet market expectations. Gold prices had been slightly lower in overnight trading. However, gains in the yellow metal are limited due to the better investor/trader risk appetite that has been in the market place the past few days. August Comex gold was last up $1.20 at $1,156.10 an ounce. September Comex silver was last down $0.087 at $15.37 an ounce.
The U.S. retail sales report for June came in at down 0.3%. Expectations were for a 0.2% rise versus a May sales figure of up 1.2%.
An agreement has been reached between Iran and the U.S., regarding Iran’s nuclear program and ending economic sanctions against Iran, reports said Monday. This is one more bearish element for the already beaten-down crude oil market, which is lower today and closing in on the $50.00-a-barrel mark. This news also significantly ratchets down the specter of Iran becoming a geopolitical hotspot in the coming months, or longer—if the deal holds up.
There were downbeat European Union and German economic reports released Tuesday. EU factory output fell in by 0.4% in May from April and was up 1.6%, year-on-year. Meantime, the German ZEW economic expectations index fell to an eight-month low of 29.7 in July from 31.5 in June. The Euro currency is slightly higher on a corrective bounce from Monday’s selling pressure.
Greece and the European Union/International Monetary Fund on Monday agreed on a debt restructuring and financial aid deal. However, the deal, which contains harsh austerity programs for Greece, must be passed by the Greek parliament, which votes on the matter Wednesday. If the Greek parliament agrees to this week’s deal, then the Greek debt crisis will move to the back burner of the market place, for now.
Traders and investors are looking ahead to Wednesday, when Federal Reserve Chair Janet Yellen makes her semi-annual appearance before the U.S. House, to discuss monetary policy with lawmakers. Yellen speaks to the Senate on Thursday.
U.S. economic data due for release Tuesday includes the weekly Johnson Redbook and Goldman Sachs retail sales reports, the NFIB small business index, import and export price indexes, retail sales, and manufacturing and trade inventories.
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Wyckoff’s Daily Risk Rating: 1.0 (Trader and investor market risk aversion is not heightened early this week.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).
The London A.M. gold fix is $1,153.20 versus the previous P.M. fix of $1,154.00.
Technically, August gold futures bears have the solid overall near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. Bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at last week’s high of $1,174.40. Bears' next near-term downside price breakout objective is closing prices below solid technical support at the March low of $1,143.80. First resistance is seen at the overnight high of $1,159.10 and then at Monday’s high of $1,163.90. First support is seen at the overnight low of $1,151.80 and then at Monday’s low of $1,149.80. Wyckoff’s Market Rating: 1.5
September silver futures bears have the solid near-term technical advantage. Prices are in a two-month-old downtrend on the daily bar chart. Bulls’ next upside price breakout objective is closing prices above solid technical resistance at $16.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $14.50. First resistance is seen at $15.50 and then at $15.75. Next support is seen at the overnight low of $15.235 and then at $15.00. Wyckoff's Market Rating: 1.5.